Abstract Plant floor material handling is a loose loop in most assembly plants. Simulation offers a quick, controllable and tunable approach for prototyping complex material handling processes in manufacturing environments. This paper proposes a hybrid simulation approach, using both discrete event and agent-based technologies, to model complex material handling processes in an assembly line. A prototype system is implemented using a commercial multi-paradigm modeling tool. In this prototype, JIT principles are applied to both the production and the material handling processes. The system performance is evaluated and system optimization directions are suggested. The proposed hybrid modeling approach facilitates the implementation of a responsive and adaptive environment in that various “what-if” scenarios can be simulated under different simulation configurations and real-time situations.